If a business owner, or person, is looking to import or export in Canada, here is a guide that can help one understand reporting obligations and regulations that they will encounter.
Most Importantly, as an exporter/importer one will have to report the goods, they are exporting. Goods that are shipped from Canada, or to, are required by the Customs Act to be declared. Canada has a responsibility. That responsibility is to ensure that anything crossing over its borders and heading overseas to an international market will not cause a security threat to any other countries. Whatever the shipper is shipping, it must be safe to travel.
The are three main objectives of export reporting are as follows:
- To control the export of restricted goods.
- To collect accurate information on Canadian exports.
- To control the outbound movement of goods in transit through Canada.
Here are the steps to follow when preparing for export:
Obtain a Business Number
Either as a business owner or an individual, a person will need to obtain a business number (abbreviation BN), which issued by the Canada Revenue Agency (CRA) for an import or export account. Good news, not only is the account free but can be set-up in just a few short minutes.
Registration for a BN can be done here:
Once on the page, just simply follow the prompts and guidelines to create the account.
Identifying the Goods Being Shipped
One must provide honest and accurate information, as well as a complete detailed description of the goods, before proceeding with the export. An accurate description is important and will assist Canada Border Services Agency (CBSA) in identifying and determining whether or not the goods being shipped are restricted, regulated, dangerous, prohibited or will require a license or permit.
Country of Origin
The origin of the goods being exported/imported can affect if required, permits.
Export permits are required for United States origin goods exported to certain countries on the Area Control List.
See Area Control List here: http://www.international.gc.ca/controls-controles/about-a_propos/expor/before-avant.aspx?lang=eng
FYI, a General Export Permit is required to export United States origin goods with a value up to CAN$2,000 or greater to all other destinations.
Luckily, a permit is not required to export United States origin goods back to the US.
For more information regarding origin, see this link: http://www.cbsa-asfc.gc.ca/publications/dm-md/d11-eng.html
Ensure Goods are Permitted for Export/Import
For obvious reasons, some goods cannot be exported/imported to and from Canada. Here are a few examples for inquiring minds:
- Drugs and narcotics controlled un the Controlled Drugs and Substances Act.
- Black bear claws, gallbladder, and paws.
- Counterfeit money, this includes counterfeit tokens of value.
- Various food items.
So no sending car wash tokens over the border to friends overseas or down south to the states.
For additional information on permitted species that are exportable, see this link: http://www.cites.org/
It is imperative that the exporter/importer ensures that the goods that are being exported/imported are allowed entry into the country of destination.
Info regarding requirements from other countries and Canada:
- (Canada) http://www.cbsa-asfc.gc.ca/publications/dm-md/d9-eng.html
It’s also possible to have the importer of one’s goods contact their local government to confirm that what is being exported comply fully with their import regulations (recommended).
How to determine whether or not goods being exported/imported need to be declared on an export/import declaration.
There are goods that do not require an exporter to report them on a declaration. Exempted goods are listed here: http://laws-lois.justice.gc.ca/eng/regulations/SOR-2005-23/page-1.html, with explanations here http://www.cbsa-asfc.gc.ca/publications/dm-md/d20/d20-1-1-eng.html.
When, or if, the export matches with one of the exemptions on the list simply inform the carrier and indicate NDR for no declaration required.
Many of the policies are the same for importing, but one will need to determine whether or not the goods being imported are subject to regulations, restrictions, permits or other requirements.
See this link from the CBSA on additional information on commonly imported commodities: http://www.cbsa-asfc.gc.ca/import/reflist-listeref-eng.html
Classifying Goods (Importing)
Once a person is sure that the goods may be imported, they’ll need to determine the correct tariff classification number. These numbers along with the goods country of origin are used to determine the rate of duty one must pay when importing.
Most trading countries, which includes Canada, use the harmonized system as the basis for their classification system.
See link for the system: http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/hcdcs-hsdcm/menu-eng.html
More information on the rules and guidelines involved in classifying goods, see this link here: http://www.cbsa-asfc.gc.ca/publications/dm-md/d10/d10-13-1-eng.html
Duties and Taxes (Importing)
Upon determining the right tariff number, one will need to establish the applicable tariff treatment that applies to your goods before you can determine the rate of duty.
General tariff information and guidelines can be found at this link here: Memorandum D11, General Tariff Information.
To determine whether or not the goods being imported are subject to the goods and services tax, see section 9 on this link here: http://www.cbsa-asfc.gc.ca/import/guide-eng.html
Shiping and Reporting Goods
If one is required to report the export to the CBSA, they must do so before export and according to timeframes contingent on the mode of transportation.
Here’s the time frame for specific modes of transportation:
- By air, 2 hours before being loaded.
- Highway, before export.
- Marine, 48 hours before goods are loaded.
- Mail, 2 hours before goods are brought to the post office.
- Rail, 2 hours before being loaded.
Determine where to report one’s goods and note that non-restricted goods can be reported at a designated export office located inland or near the border. See link for offices: http://www.cbsa-asfc.gc.ca/do-rb/services/export-eng.html
Submit an export declaration if required by one of the following methods:
When the above two electronic methods are not feasible or practical, the exporter can use this form: http://www.cbsa-asfc.gc.ca/publications/forms-formulaires/b13a-eng.html
This is a brief walk through the world of exporting and importing policies and regulations in Canada. For all other inquiries and additional information, please visit link one for importing and link to exporting.
Link 1(Importing) http://www.cbsa-asfc.gc.ca/import/guide-eng.html